Current Affairs Current Affairs - 15 December 2017 - Vikalp Education

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Current Affairs - 15 December 2017

General Affairs 

Best Example Of 'Make in India', Says PM Modi As INS Kalvari Joins Navy
  • As he commissioned the INS Kalvari into the Navy today, Prime Minister Narendra Modi called it an "excellent example of Make-in-India".

    INS Kalvari, a Scorpene-class submarine described as a "deadly predator", is one of six built by Mazagon Dock Limited in Mumbai as a part of Project-75 of the Indian Navy.

    "Kalvari" is named after the tiger shark, a deep sea predator of the Indian Ocean; officials say the name reflects the submarine's agility, strength and predatory prowess.

    INS Kalvari is the first conventional submarine to be inducted into the Navy after more than 17 years, even as the navy's submarine arm celebrates it golden jubilee in 2017.

    The very first Indian Navy submarine also bore the name Kalvari and was commissioned in December 1967. The Indian Navy has been operating submarines (including nuclear attack and ballistic missile submarines) for 50 years.

    "It is a big step in the field of will boost the Navy's might," PM Modi said, speaking at the commissioning function that also featured Defence Minister Nirmala Sitharaman and Navy chief Admiral Sunil Lanba.

    Stressing on the importance of maritime security, he said: "I call it by a special name S. A. G. A. R.- Sagar or Security and Growth for All in the Region."

    The Kalvari went through 120 days of extensive sea trials and tests for various equipment, an official earlier said, adding the submarines have been designed by French naval defence and energy company DCNS.

    The first Kalvari, commissioned in 1967, was also the first submarine of the Indian Navy. It was decommissioned on May 31, 1996 after nearly three decades of service.

    India has just about 15 submarines, a mix of Russian-origin Kilo-class vessels and German HDW submarines. China has four times as many.

Major Shake Up Being Given To Defence Ministry: Nirmala Sitharaman
  • A "shake up" is being given to the defence ministry to speed up various acquisition projects, ensure transparency and clear backlogs for key programmes, Defence Minister Nirmala Sitharaman today said.

    In an address to an industry chamber, she also said the government is seriously examining functioning of around 39 ordnance factories and possible ways to boost their productivity including through joining of hands by the private sector.

    She said the efforts are on to ensure that the defence acquisition council (DAC) clears all the backlog relating to various procurement by December 31, emphasising that speeding up of decision making process has been one of her focus areas.

    The DAC is defence ministry's highest decision making body on procurement.

    "There is a sense of making sure that every aspect of this large ministry is given a shake up," Ms Sitharaman said, adding the aim is to make a difference so that the ministry, which was sort of a cocooned, do things in a faster and transparent way.

    On various acquisition projects, she said, "I may be confident enough to say that by December 31, at least DAC would be on the top of it in the sense that no more waiting list would be with me." She was addressing a FICCI event.

    Ms Sitharaman, who assumed charge of the ministry in September, also said ensuring transparency is a major priority area for her.

    "The biggest compliance issue which we are definitely 100 per cent following is to have greater transparency, put everything in the public domain and make sure that every decision stands up to the principle of accountability," she said.

    Her comments came in the backdrop of the Congress accusing the government of flouting laid down norms in sealing a deal to purchase 36 Rafale fighter jets from France.

    The party had recently raised several questions about the deal including the rates, and accused the government of compromising national interest and security while promoting "crony capitalism" and causing a loss to the public exchequer.

    The government had rejected the allegations. Asked about handing over of the strategically located Hambantota port to China on a 99-year lease by the Sri Lankan government, she only said India has been watchful of all the developments in the neighbourhood.

    On ordnance factories, she said government was doing a major review of their work and examine whether they can have joint venture or benefit from technology transfer.

    Talking about the Defence Research and Development Organisation (DRDO), Ms Sitharaman said it should identify the patentable products so that they can be used commercially.

    Referring to the strategic partnership model, she said it was brought to support the domestic defence industry and to ensure that India, which is now a leading importer of military hardware, becomes a defence exporter.

    The strategic partnership was unveiled nearly four months back under which domestic defence manufacturers can tie up with leading global defence majors to manufacture specific military platforms like fighter jets.

    Ms Sitharaman also said the government was in the process of identifying "organically grown" defence industry clusters in various parts of the country so that they can be supported.

    "We are planning to tell them about the requirement of the armed forces for the next 40-50 years so that they can lay a roadmap for their capacity building," she said.

PM Modi Facing Crisis Of Credibility, Says Rahul Gandhi
  • The Congress president-elect Rahul Gandhi today lashed out at Prime Minister Narendra Modi, alleging that he was facing a "crisis of credibility" and had stopped talking of corruption.

    Speaking at a massive rally of congress workers here, Mr Gandhi said people no longer believe in what he (Modi) says.

    "Today three years after he came to power, Prime Minister Modi is facing a crisis of credibility. People listen to his speeches, but no longer believe in what he says." "The reason for this is his actions and the performance of his government in the last three years," he said.

    Mr Gandhi said the Prime Minister had committed to the youth of the country that he will get two crore jobs every year for them. He had also laid out a vision of Make In India, Start-up India and Connect India.

    The Prime Minister had also challenged China's dominance in manufacturing, Mr Gandhi said.

    "However, today the truth was out. We asked the government some time back how many jobs have been created under the Make-in-India, Startup India and connect India programmes," he said.

    While China creates 50,000 jobs in 24 hours, a minister replied in Parliament that 450 jobs were created in India in 24 hours, the Congress leader said.

    Just like the Kerala government had lost the faith of people, the government of India under Narendra Modi had also lost the faith of the people, he said.

    "Three years ago the PM came to power on a lot of hope. The people had so many expectations, they believed in his words and they believed in what he said," Mr Gandhi said.

    He was addressing congress workers at the formal valedictory function of the one month long 'Padayorukkam' rally led by opposition leader Ramesh Chennithala from Kasaragod to Thiruvananthapuram.

    Mr Gandhi, who arrived here after a hectic electioneering in Gujarat, said his party had fought an "extremely aggressive election" in that state.

Railways Forms Committee To Review Flexi-Fare System
  • After months of deliberations, the railway board has finally initiated the process of reviewing the flexi-fare system in premium trains by comparing the prices with that of other modes of transport in the same sectors.

    According to a railway board letter dated December 11, a copy of which is with news agency PTI, the board has formed a six-member committee to review the system and submit a report in 30 days.

    The committee consists of railway board officials along with Ravinder Goyal, Adviser, NITI Ayog, Meenakshi Malik, Executive Director, Revenue Management, Air India, S Sriram, professor of transport economics and Iti Mani, Director, Revenue, Le Meridien, Delhi.

    "The broad terms and reference of the committee shall be to examine all options and recommend the best option keeping in mind passengers and railways' interest", the letter stated.

    The flexi-fare system, launched in September 2016, led to up to 50 per cent increase in fares. Under the formula, base fares increase from 10 per cent to 50 per cent with every 10 per cent of berths booked.

    While revenue increased, the railways lost passengers as several berths remained vacant, officials said.

    "The committee should should assess the impact of implementation of flexi-fare in its current form with respect to revenue generated for the railways, impact on passengers in terms of their choice of the railways as a means of transport with increased fare," the letter said.

    It has also suggested that the committee explore ways to offer adds-ons to passengers like loyalty benefits or deferred benefits for better patronage of the scheme.

    The committee will also recommend if modifications or amendments can be brought to the the flexi-fare system to offer passengers flexibility of rates during peak season, lean season or during week days or weekends or during festivals.

    The committee has also been asked to review the fares of the Humsafar Express which was launched last year.

3-Man Crew Returns From International Space Station
  • A capsule carrying U.S., Russian and Italian astronauts from the International Space Station (ISS) landed in Kazakhstan on Thursday after a five-month mission, a NASA TV live broadcast showed.

    The spacecraft brought back Randy Bresnik from the U.S. National Aeronautics and Space Administration, Sergey Ryazanskiy from Russian space agency Roscosmos, and Italy's Paolo Nespoli with the European Space Agency.

    The capsule landed in the windswept and snow-covered steppe in Kazakhstan's central Karaganda region at 2.37 pm (0837 GMT).

    Smiling Ryazanskiy was the first to emerge from the capsule's hatch, assisted by rescue workers.

    The trio's departure has reduced to just three the crew of the ISS, a $100 billion lab that flies about 250 miles (400 km) above Earth.

    On Dec. 17, NASA astronaut Scott Tingle, Anton Shkaplerov of Roscosmos and Norishege Kanai of the Japan Aerospace Exploration Agency will blast off from the Baikonur cosmodrome, also in Kazakhstan, to join the ISS crew.

Business Affairs

Strengthening Public Sector Banks Is Top Priority, Says Arun Jaitley
  • Having implemented the Goods and Services Tax (GST), Finance Minister Arun Jaitley today said strengthening the public sector banks is most important agenda for the next year.

    "There are important tasks when we look at the next year...fixing the banks and completing the unfinished task of strengthening the public sector banks (PSBs), I think, is unquestionably one of the most important agendas on table today," he said while addressing FICCI's annual general meeting here.

    He further said the government has already announced the detailed recap plans and the idea behind this move is to ensure that banks are able to support growth and their lending capacity more particularly to the MSME sector is enhanced.

    "We want MSME sector to strengthen. This sector has been at the receiving end in last few years particularly with lending capacity of banks being depleted as a result of NPAs.

    The lending capacity of banks will improve as capital adequacy strengthens," he added.

    Jaitley in October had announced an unprecedented Rs. 2.11 lakh crore two-year road map to strengthen PSBs, reeling under high non performing assets (NPAs) or bad loans.

    Their NPAs have increased to Rs. 7.33 lakh crore as of June 2017, from Rs. 2.75 lakh crore in March 2015.

    Asked if 180 days is inadequate for resolution of NPAs under the Insolvency and Bankruptcy Code, the finance minister gave a curt reply saying "well I think if you stop thinking like lawyers it can happen".

    Giving different scenarios, he said for the simple reason that if an asset has been mismanaged or an asset is incapable of being managed by a particular management, then the whole object is expeditious resolution.

    "Otherwise if you allow the status quo, its (banks are) starved of funds, its net worth is eroding and if you allow it to continue then you are only perpetuating the problem and making it unresolvable.

    "But if at the appropriate time you enter expeditiously and expeditiously you either allow the same promoter to continue, if he is capable of resolution, and if it's not capable of resolution and you find another resolution, then it has to be done fast," he said.

    Pointing that courts are used to delay, he said assets can rust away if the resolution is not undertaken in a time bound manner.

    "And therefore I said that if you stop thinking like a lawyer then we realise what the cost of delay in an asset can be," he said.

    Terming GST council as a body that is maturing as federal institution, Jaitley said it is working with regard to reduction of compliance burden.

    Besides, he said, the Council has prepared schedule with regard to eway bill to check evasion.

    "I think Council has already taken decision with regard to time schedule with regard to eway bill itself. That will help in enhancing collection," he said.

    Earlier in the day Bihar Finance Minister Sushil Modi said eway bill in a phased manner would be implemented from January 1.

    The finance minister said that after the unified GST is implemented it would take some time to rationalise taxes. It was important to continue with structural reforms for greater formalisation of the economy, he said adding that it was only when the tax base is widened in a formalised economy, the rationalisation of direct and indirect taxes is possible.

    All efforts are being made to make India tax compliant society, Jaitley said.

    Jaitley also emphasised the need to continue the momentum on infrastructure creation and expedite investment in railways to propel the Indian economy. He said India has had one of the highest  infrastructure spendings in the world but the momentum needs to be sustained.

    There is a need to "hurry up" on investment in railway infrastructure, including on stations and super fast and bullet trains, he said.

    With regard to the development in rural areas, Jaitley said that main focus of expenditure in the next few years would be on housing and sanitation.

Is Aadhaar-Linking Mandatory? Supreme Court Reserves Order Till Tomorrow
  • The Supreme Court today reserved its order for tomorrow on a clutch of interim pleas seeking a stay on government's decision of mandatory linking of Aadhaar with welfare schemes, as the Centre conceded saying it would extend the deadline up to March 31 next year.

    However, the Centre vehemently pressed before the five-judge constitution bench headed by Chief Justice Dipak Misra for allowing the national biometric identifier to remain mandatory for opening new bank accounts.

    The bench, also comprising Justices A K Sikri, A M Khanwilkar, D Y Chandrachud and Ashok Bhushan, heard arguments in support and against the mandatory linkage of Aadhaar for nearly three hours in a packed courtroom and said it would pronounce its interim order tomorrow morning.

    The top court, which fixed the main petitions challenging the Aadhaar scheme itself for final hearing on January 17 next year, said it would consider the submission of Attorney General K K Venugopal that deadline of February 6, 2018 for mandatory linking of Aadhaar with mobile services can also be extended up to March 31 next year.

    Venugopal referred to an earlier apex court order asking the Centre to ensure verification of existing and new mobile users by February 6 and hence, the government, on its own, cannot extend the deadline.

    "The deadline for almost everything has been extended," the top law officer said, adding that Aadhaar was mandatory for new bank accounts and several crores of existing bank accounts have already been linked.

    "If everything is extended till March 31, we can take it (matter) up in the second week of January," the bench said. This led a battery of senior lawyers including Shyam Divan, Gopal Subramanium, Arvind Datar, K T S Tulsi, Meenakshi Arora, K V Vishwanathan and Anand Grover, representing those opposing Aadhaar, to plead in unison for a direction to the Centre that no coercive action be taken if a person refuses to provide Aadhaar to avail services and benefits.

    At the outset, Divan referred to various orders passed since 2013 by several benches of the apex court to highlight his point that Aadhaar was "voluntary" and not "mandatory" and it was meant to be used in few schemes like PDS, LPG, MGNREGA and Jan Dhan Yojna.

    The apex court had time and again made it clear that no person shall be deprived of any benefit, which otherwise accrue to him, for want of Aadhaar, but these orders have been violated with impunity by the Centre which has come out with as many as 139 notifications making Aadhaar mandatory for almost everything, he said.

    "The government went on a notification spree curtailing individual freedom and privacy despite interim orders from the Supreme Court that Aadhaar is voluntary" while continuing to assure the court that it will be a voluntary scheme, he said.

    Divan passionately argued and referred to various notifications and reports on making Aadhaar mandatory for HIV patients, CBSE, JEE, UGC scholarship, nursery admissions and said these actions diminished the majesty and authority" of the Supreme Court orders.

    The CJI cut short Divan's arguments, saying he should stick to the pleadings rather than "hyperbole, rhetorics" and said the court will not be guided by news reports.

    "You may have a point on constitutionality, legality. You have a point that these circulars deprive persons dependant on social welfare. But all this material should be on record before us and the other side (Union) should be in the know," the bench observed.

    Venugopal said he may not be able to defend authorities like Uttar Pradesh and UGC as they are not parties here and notices have not been issued on those interim applications.

    Subramanium and other lawyers also said that the Aadhaar legislation cannot take away the basis of the apex court orders that the scheme was voluntary.

    Senior advocate Anand Grover raised the issue of data safety and said some persons and companies involved with the scheme, were connected to US agencies like the FBI and the CIA and were also providing services to some Pakistani departments or authorities.

    The government had yesterday issued a notification to extend till March 31 the deadline for mandatory quoting of Aadhaar and Permanent Account Number (PAN) for bank accounts and certain financial transactions. However, there is no word on extending the February 6, 2018 deadline for linking mobile SIM cards with Aadhaar.

    Recently, a nine-judge constitution bench of the apex court had held that Right to Privacy was a Fundamental Right under the Constitution. Several petitioners challenging the validity of Aadhaar had claimed it violated privacy rights.

    Some petitioners in the top court have termed the linking of the Unique Identification Authority of India (UIDAI) number with bank accounts and mobile numbers as "illegal and unconstitutional".

    They have also objected to the CBSE's alleged move to make Aadhaar mandatory for students appearing for examinations, a contention denied by the Centre.

Government To Discuss MDR Rate Issue With RBI, Says Report
  • The government will hold deliberations with the Reserve Bank to work out a mechanism for bringing down merchant discount rates (MDR) which have increased from 0.25 per cent of transaction value to 0.90 per cent recently, a finance ministry official said.

    According to a senior finance ministry official, the surge in charges would impact Digital India movement so there is need to look into the issue.

    "Most merchants will be discouraged to use POS machines, especially small merchants who do not get input tax credit in GST. This will discourage them from using POS machines," the official said.

    There are around 27-28 crore transactions that are held per month on the Point of Sale (POS) machines with an average size of Rs. 1,500.

    Last year after demonetisation, RBI as a special measure had capped the MDR at 0.25 per cent of the transaction value for transaction up to Rs. 1,000 and 0.5 per cent for transactions above Rs. 1,000 and up to Rs. 2,000.

    The new norms announced by RBI a week ago, puts the MDR charges at 0.40 per cent if the transaction involves physical infrastructure such as a swipe machine for small merchants with turnover up to Rs. 20 lakh during the previous financial year.

    The MDR charges are capped at 0.90 per cent for other merchants limited to Rs. 1,000 per transaction.

    The RBI on December 6 revised the MDR for debit card transactions at large format retail stores from 0.5 per cent per transaction to 0.9 per cent (not exceeding Rs. 1,000). The Retailers' Association of India (RAI) has also raised this issue with the government and the regulator.

    They have demanded that the MDR charge should be kept at 0.40 per cent and that the revised charges will increase the cost of merchants which they will have to pass on to consumers.

    While the RBI said the rates have been rationalised to increase the acceptance of debit cards by a wider set of merchants, the increase and the high cap defeat the purpose as it almost doubles the cost borne by merchants, RAI said in a statement.

Abu Dhabi-Based Fund Looks To Invest $2 billion In India
  • Next Orbit Ventures (NOVF) ESDM, a newly established Abu Dhabi-based fund, said on Wednesday it had launched a $2 billion fund to invest in India's semiconductor and electronics industries.

    Mumbai-based private equity firm Next Orbit Ventures set-up the fund under the regulation of the Abu Dhabi Global Market financial centre after receiving funding commitments from the Gulf region.

    Around $1.5 billion for the fund will be raised from the region, while the remaining $500 million has been secured from a consortium of investors involving both the Indian government and ultra high net worth individuals, NOVF said.  

    The investments are aimed at creating the required infrastructure to cope with India's fast-growing market for electronic goods and components.

    India imported nearly $45 billion worth of electronic goods and components in 2016, according to a study by Ernst & Young and the Indian Electronics & Semiconductor Association.

    The Indian government has been trying to boost investments in the semiconductor industry to curb the risk of trade imbalances and enhance cybersecurity.

    Costlier Onion, Veggies Push Wholesale Inflation To Eight-Month High
    • Wholesale price inflation accelerated in November to an eight-month high, due to a sharp rise in onion and vegetable prices, government data showed on Thursday. Annual wholesale price inflation last month increased to 3.93 per cent from a year earlier, as compared to a 3.59 per cent rise in October. Economists in a Reuters poll had forecast wholesale inflation to rise 3.78 per cent. Wholesale prices of food articles increased to 6.06 per cent in November, as against 4.30 per cent in October, as per the data released by the Commerce Ministry.

      Onion, a kitchen staple, witnessed a whopping 178.19 per cent rise in inflation last month on an annual basis. Vegetable prices too spiked 59.80 per cent on an annual basis. 

      Aditi Nayar, principal economist at ICRA Limited, said the spike in vegetable prices led by onions and tomatoes was the chief factor that pushed up the primary food inflation to a 16-month high of 6.1 per cent in November 2017.

      Rising commodity prices resulted in an uptick in inflation for minerals, crude petroleum as well as some sub-sectors of non-food manufactured products in November 2017, she said.  The index for fuel and power also showed a climb of 8.82 per cent. 

      Data released earlier this week showed retail or consumer inflation in November breached the medium-term target of 4 per cent of Reserve Bank of India's (RBI). This could put pressure on it to raise policy rates in 2018.

      Consumer inflation rose to a 15-month high of 4.88 per cent last month, up from 3.58 per cent in October.

      Last week, the RBI held rates unchanged, despite having faced some pressure to cut rates to aid growth. The central bank's increased concern about inflation has prompted it to hold rates since a trim in August.

      The RBI has raised its inflation projection to between 4.3 per cent and 4.7 per cent for the six months ending in March 2018.

    General Awareness

    Urbanization in India: Facts and Issues

    • Introduction

      Urban areas have been recognized as “engines of inclusive economic growth”. Of the 121 crore Indians, 83.3 crore live in rural areas while 37.7 crore stay in urban areas, i.e approx 32 % of the population. The census of India, 2011 defines urban settlement as :-

      All the places which have municipality, corporation, cantonment board or notified town area committee
      All the other places which satisfy following criteria :

      a. A minimum population of 5000 persons ;

      b. At least 75 % of male main working population engaged in non-agricultural pursuits ; and

      c. A density of population of at least 400 persons per square kilometer

      The first category of urban units are known as Statutory town. These town are notified under law by respective State/UT government and have local bodies like municipal corporation, municipality, etc, irrespective of demographic characteristics. For example- Vadodara (Municipal corporation), Shimla (Municipal corporation)

      The second category of towns is known as Census Town. These were identified on the basis of census 2001 data.Cities are urban areas with more than 100,000 population. Urban areas below 100,000 are called towns in India

      Similarly Census of India defines:-

      Urban Agglomeration (UA): An urban agglomeration is a continuous urban spread constituting a town and its adjoining outgrowths (OGs), or two or more physically contiguous towns together with or without outgrowths of such towns. An Urban Agglomeration must consist of at least a statutory town and its total population (i.e. all the constituents put together) should not be less than 20,000 as per the 2001 Census. In varying local conditions, there were similar other combinations which have been treated as urban agglomerations satisfying the basic condition of contiguity. Examples: Greater Mumbai UA, Delhi UA, etc.

      Out Growths (OG): An Out Growth (OG) is a viable unit such as a village or a hamlet or an enumeration block made up of such village or hamlet and clearly identifiable in terms of its boundaries and location. Some of the examples are railway colony, university campus, port area, military camps, etc., which have come up near a statutory town outside its statutory limits but within the revenue limits of a village or villages contiguous to the town.

      While determining the outgrowth of a town, it has been ensured that it possesses the urban features in terms of infrastructure and amenities such as pucca roads, electricity, taps, drainage system for disposal of waste water etc. educational institutions, post offices, medical facilities, banks etc. and physically contiguous with the core town of the UA. Examples: Central Railway Colony (OG), Triveni Nagar (N.E.C.S.W.) (OG), etc.

      Each such town together with its outgrowth(s) is treated as an integrated urban area and is designated as an ‘urban agglomeration’. Number of towns/UA/OG 2011, according to Census 2011 Census are :-

      1 Statutory Towns — 4,041

      2 Census Towns — 3,894

      3 Urban Agglomerations — 475

      4 Out Growths — 981

      At the central level, nodal agencies which look after program and policies for urban development are Ministry of housing and urban poverty alleviation (MoHUPA) and Ministry of Urban development. Urban development is a state subject. At state level there are respective ministries, but according to 74th Constitutional Amendment act,1992, it is mandatory for every state to form ULBs and devolve power, conduct regular election, etc. Under 12 schedule of Indian constitution , 18 such functions have been defined which are to be performed by ULBs and for that states should support the ULBs through finances and decentralization of power, for more autonomy. But this is not uniform throughout all the states and still more is need to be done to empower ULBs in India.

      Urban areas are managed by urban local bodies(ULBs), who look after the service delivery and grievance redressal of citizens. There are eight type of urban local government in India- municipal corporation municipality, notified area committee, town area committee, cantonment board, township, port trust and special purpose agencies.

      Migration is the key process underlying growth of urbanisation; and the process of urbanization is closely related with rural to urban migration of people. In most developing countries of the world where rate of urban growth is relatively higher the urban-ward migration is usually high. Rural to urban migration is by far the major component of urbanisation and is the chief mechanism by which urbanisation trends all the world-over has been accomplished

      After independence, urbanization in India is increasing at very high pace, but at the same time there are some problems, which are becoming barriers for balance, equitable and inclusive development.

      History of Urbanization in India

      In 1687- 88, the first municipal corporation in India was set up at Madras. In 1726, Municipal Corporation were set up in Bombay and Calcutta. In 1882,a resolution was passed and according to which, panchayat were to be formed at village level, district boards, taluq boards and municipalities also came into existence. At that time Lord Ripon was Viceroy of India, and for this Lord Ripon is known as father of local self-government in India.

      Urbanization since independence has been focused through respective five year plans as follows:

      First two plan focused on institution and organization building and same was instructed to the states to do.
      For ex. Delhi development Authority, Town and country planning organization came during this period.

      Third plan (1961-66) was turning point in urban planning history, as it emphasized on importance of towns and cities in balanced regional development. So, it advised urban planning to adopt regional approach. It also emphasized the need for urban land regulation, checking of urban land prices, preparation of master plan, etc.

      Forth plan (1969-74), continued with the theme of third plan and development plans for 72 urban areas were undertaken. Regional studies in respect of metropolitan regions around Delhi, Mumbai and Calcutta were initiated.

      During fifth plan, urban land ceiling act was passed in 1976. It also advised the state governments to create metropolitan planning regions to take care of the growing areas outside administrative city limits. Mumbai metropolitan region development authority (MMRDA) in 1974 and Housing and urban development cooperation in 1975 were established. It also emphasized the urban and industrial decentralization.

      The sixth five year (1978-83) plan stressed the need to develop small and medium sized towns (less than 1 lakh), and a scheme of Integrated development of Small and Medium towns(IDSMT) was launched in 1979 by central government.

      During the seventh plan, some important institutional developments were done, which shaped the urban development policy and planning.
      The National commission on urbanization submitted its report in 1988 and 65th constitutional amendment was introduced in Lok Sabha in 1989, this was first attempt to give urban local bodies a constitutional status with three tier federal structure. But it was not passed and was finally passed in 1992 as 74th constitutional amendment act and came into force in 1993.

      During Eighth plan, the Mega city scheme was introduced in 1993-94 covering five mega cities of Mumbai, Calcutta, Chennai, Bangalore and Hyderabad. Also IDSMT scheme was revamped through it infrastructural development programs for boosting employment generation for diverting migration from big cities to the small and medium towns.

      The ninth plan, continued with the schemes of the eighth plan and also emphasized on decentralization and financial autonomy of urban local bodies. A new program called Swarna jayanti Shahari Rozgar yojna (SJSRY) in 1997 with two sub plan– 1. Urban self-employment program and 2. Urban wage employment programme, i.e. targeting for urban poverty reduction and employment. It was decided by central government to revamp SJSRY in 2013 as National urban Livelihood Mission (NULM).

      The Tenth plan(2002-07) recognized the fact that urbanization played a key role in accelerating the economic growth in 1980s and 1990s as a result of the economic liberalization and also stressed that without strengthening the urban local bodies, the goal of urbanization cannot be achieved.
      The eleventh plan (2007-2012) introduced some innovative changes through capacity building, increasing the efficiency and productivity of the cities, dismantling the monopoly of public sector over urban infrastructure, using technology as a tool for rapid urbanization.

      In this direction major initiative launched by central government was JNNURM(Jawaharlal Nehru National Urban renewal mission) in 2005 for focused and integrated development of the urban infrastructure and services, initially for 63 cities. This program was to be continued till 2012, but it has been extended, covering more number of cities.

      Focus of JNNURM was on provisions for urban poor, including housing, water supply and sanitation, urban transport, road network, and the development of inner/old city areas, etc. The earlier programs, as mentioned above like Mega city, IDSMT, etc. were merged with it.

      Under JNNURM it was made mandatory for each cities to formulate City Development Plan(CDP) for long term vision of development. It also aimed to make private players part of urban development through PPP(Public private partnership)

      Rajiv Awas Yojana, was launched in 2011 for creating “slum free India” as a pilot project for two years. But now it has been extended till 2022. It is applicable to all slums in the city whether notified or non-notified. It is also applicable to urban homeless and pavement dwellers.

      The 2011 Census was the first one that collected data on people living in slums that have become commonplace in a rapidly urbanizing India. It found that around one out of every six households in urban India (17.4%) is in a slum, and that well over one-third of all slum households in the country (38%) are in cities with a population in excess of a million.

      The twelfth five year plan (2012-2017) proposed to consolidate JNNURM and envisaged its wider role in urban reforms. During twelfth plan , the components of JNNURM are :-
      Urban infrastructure governance(UIG)
      Rajiv Awas Yojana (RAY)
      Slum rehabilitation in cities not covered under RAY
      Capacity building
      The plan has also highlighted the reasons which are acting as hurdles in the success of the program as:-
      Failure to mainstream the urban planning 
      Incomplete reform and slow progress in project implementation
      Delay in securing land for projects
      Delay in getting approval from various regulators
      Challenges in urban development

      Institutional challenges 

      Urban Governance
      74th amendment act has been implemented half-heartedly by the states, which has not fully empowered the Urban local bodies (ULBs). ULBs comprise of municipal corporations, municipalities and nagar panchayats, which are to be supported by state governments to manage the urban development. For this , ULBs need clear delegation of functions, financial resources and autonomy. At present urban governance needs improvement for urban development, which can be done by enhancing technology, administrative and managerial capacity of ULBs.

      Planning is mainly centralized and till now the state planning boards and commissions have not come out with any specific planning strategies an depend on Planning commission for it. This is expected to change in present government, as planning commission has been abolished and now focus is on empowering the states and strengthening the federal structure.

      In fact for big cities the plans have become outdated and do not reflect the concern of urban local dwellers, this needs to be take care by Metropolitan planning committee as per provisions of 74th amendment act. Now the planning needs to be decentralized and participatory to accommodate the needs of the urban dwellers.

      Also there is lack of human resource for undertaking planning on full scale. State planning departments and national planning institutions lack qualified planning professional. Need is to expand the scope of planners from physical to integrated planning- Land use, infrastructure, environmental sustainability, social inclusion, risk reduction, economic productivity and financial diversity.

      Major challenge is of revenue generation with the ULBs. This problem can be analyzed form two perspectives. First, the states have not given enough autonomy to ULBs to generate revenues and Second in some case the ULBs have failed to utilize even those tax and fee powers that they have been vested with.

      There are two sources of municipal revenue i.e. municipal own revenue and assigned revenue. Municipal own revenue are generated by municipal own revenue through taxes and fee levied by them. Assigned revenues are those which are assigned to local governments by higher tier of government.

      There is growing trend of declining ratio of own revenue. There is poor collection property taxes. Use of geographical information system to map all the properties in a city can have a huge impact on the assessment rate of properties that are not in tax net.

      There is need to broaden the user charge fee for water supply, sewerage and garbage disposal. Since these are the goods which have a private characteristics and no public spill over, so charging user fee will be feasible and will improve the revenue of ULBs , along with periodic revision. Once the own revenue generating capacity of the cities will improve, they can easily get loans from the banks. At present due to lack of revenue generation capabilities, banks don’t give loan to ULBs for further development. For financing urban projects, Municipal bonds are also famous, which work on the concept of pooled financing.


      There is exponential increase in the real estate, encroaching the agricultural lands. Also the rates are very high, which are not affordable and other irregularities are also in practice. For this, we need regulator, which can make level playing field and will be instrumental for affordable housing and checking corrupt practices in Real estate sector.

      Infrastructural challenges

      Housing provision for the growing urban population will be the biggest challenge before the government. The growing cost of houses comparison to the income of the urban middle class, has made it impossible for majority of lower income groups and are residing in congested accommodation and many of those are devoid of proper ventilation, lighting, water supply, sewage system, etc. For instance in Delhi, the current estimate is of a shortage of 5,00,000 dwelling units the coming decades. The United Nations Centre for Human Settlements (UNCHS) introduced the concept of “Housing Poverty” which includes “Individuals and households who lack safe, secure and healthy shelter, with basic infrastructure such as piped water and adequate provision for sanitation, drainage and the removal of household waste”.

      Safe Drinking Water
      The safe drinking water sources are also found to be contaminated because of water in the cities are inadequate and in the future, the expected population cannot be accommodated without a drastic improvement in the availability of water. The expenses on water treatment and reuse will grow manifold.

      The poor sanitation condition is another gloomy feature in urban areas and particularly in slums and unauthorized colonies of urban areas. The drainage system in many unorganized colonies and slums are either not existing and if existing are in a bad shape and in bits resulting in blockage of waste water. This unsanitary conditions lead to many sanitation related diseases such as diahorrea and malaria. Unsafe garbage disposal is one of the critical problem in urban areas and garbage management always remained a major challenge.

      Health conditions
      The important indicators of human development are education and health. The health condition of urban poor in some areas are even more adverse compared to rural areas. As many as 20 million children in the developing countries are dying consequent to drinking water. About 6, 00,000 persons are losing their lives on account of indoor air pollution (Jagmohan, 2005).

      The National Family Health Survey, 2006-07 has envisaged that a lot of women and children are suffering from nutritional anaemia and diseases like tuberculosis and asthma are occurring in good number. Providing health care services to the growing urban population is major challenge before the government health care delivery system.

      They have to take the help of private players as public health facilities are poor. In case of migrants, they cannot take the benefit of government policies, so they have to pay very high charges, which keep them in the vicious cycle of poverty. Urban education system also is becoming elite in private institution due to limited seats and high charged fee. The condition of public educational institution is dismal.

      Urban public transport
      As high income individual are buying more private vehicle and use less public transport. Such huge number of vehicles in cities is causing more traffic jam, which in turn decreases the efficiency of public transport. Also the penetration of public transport is less, which make people use private vehicle. Public transport
      is less disabled friendly. There is also lack of infrastructure and poor maintenance of existing public transport infrastructure

      Other challenges

      Environmental concern
      Vulnerability to risk posed by the increasing man-made and natural disasters. According to UNDP 70 % of Indian population is at risk to floods and 60% susceptible to earthquakes. The risk are higher in urban areas owing to density and overcrowding. Urban areas are becoming heat islands, ground water is not being recharged and water crisis is persistent. Here making, water harvesting compulsory will be beneficial

      Urban Crime
      Prevention of urban crime is another challenge before the government of States having more number of urban areas and particularly metropolitan cities. The mega cities are facing increased criminal activities on account of unchecked migration, illegal settlements and diverse socio-cultural disparities, organized groups, gangsters, professional criminals for wishing a lavish life in metropolis. The cities of Delhi, Mumbai and Bengaluru have accounted for 16.2 percent, 9.5 percent and 8.1 percent respectively of the total crime reported from 35 mega cities. Prevention of crime in mega cities is a challenge before the city government in India.

      Roughly a third of the urban population today lives below the poverty line. There are glaring disparities between haves and have-nots in urban areas. The most demanding of the urban challenges, unquestionably is the challenge posed by poverty; the challenge of reducing exploitation, relieving misery and creating more human condition for urban poor. There is rise in urban inequality, as per UN habitat report, 2010, urban inequality in India rose from 34 to 38 % based on consumption in period of 1995 to 2005.

      Provision of Employment
      Providing gainful employment to the growing urban population is a major challenge before the government. It is generally observed that the literate and semi-literate migrants are absorbed with minimal works, carrying lower wage and more hour of work. The Un Habitat Report (2003) has rightly remarked “The cities have become a dumping ground for surplus population working in unskilled, unprotected and low wage informal service industries and trade”.

      The urban workers are increasingly being pushed into the informal sector and without any adequate activities in the cities were carried on in public places like footpaths, open empty spaces, parks or just in the streets. The plight of rickshaw pullers and street vendor is widely noted and commented upon. As the rural agriculture sectors is shrinking day by day the challenges before the urban sector to
      provide viable employment to migrating population will be a daunting task in the coming year.

      Steps Taken by Government to improve urban Development

      The Constitution (74th Amendment) Act
      came into effect in 1993, emphasizes to strengthen urban planning, regulation of land use, roads and bridges and providing urban amenities.
      National Urban Transport Policy,2006:
      Its main purpose is to provide affordable, comfortable, safe and rapid, reliable and sustainable urban transport system, for the growing number of city resident to jobs, education and recreation and such other needs with in our cities.

      Encouraging integrated land use and transport planning in all cities so that travel distances are minimized and access to livelihoods, education, and other social needs, especially for the marginal segments of the urban population is improved

      National Urban Renewal Mission(NURM), 2005

      The primary objective of the JnNURM is to create economically productive, efficient, equitable and responsive cities. The JnNURM consists of two sub-missions Urban Infrastructure and Governance (UIG) and Basic Services for Urban Poor (BSUP).

      The Mission focuses on: Integrated development of infrastructure services; securing linkages between asset creation and maintenance for long run project sustainability; accelerating the flow of investment into urban infrastructure services; planned development of cities including the peri-urban areas, out growths, and urban corridors; renewal and re-development of inner city areas;

      Universalisation of urban services so as to ensure their availability to the urban poor.

      Introduction to Metro trains

      in Delhi, Kolkata, Bangalore etc. are part of above mentioned initiatives. Recently cabinet has also passes proposal for second phase of Bangalore Metro (Namma Metro). In addition to this government has done many feasibility studies in Tier-II & III cities. Now one million plus cities can go for metro project according to new urban policy.
      India’s first monorail

      It will be thrown open to the public, eight years after it was first proposed, with the Maharashtra government. With this, India will join countries like the U.S., Germany, China, Japan, Australia and Malaysia that run monorails.

      Smart city concept
      In the budget, 2014, it was projected for ‘one hundred Smart cities’, as satellite towns of larger cities and modernizing the existing mid- sized cities. Though there is no clear definition of smart cities, but it may include creative, cyber, digital, e-governed, entrepreneurial, intelligent, knowledge, harnessing the power of Information and communication technology (ICT). Smartness has to be there with respect to governance and service delivery.

      Its feature can be :-

      e-governance (through Digital India initiative, National e-governance plan, National Optical fiber network, e- panchayat project of MRD)

      Continuous improvements in design and management 
      Climate oriented development 
      Mass transit oriented development 
      People centric technological applications (m-health, e- learning )
      Planning can be bottom up for future urbanization 
      Smart PDS rationing 
      Social inclusive and economically diverse.
      Swachh Bharat 
      Clean urban areas will attract tourists and can increase the economic diversity of the urban dwellers and it will be also source for revenue generation for ULB.


      There should be focussed attention to integrated development of infrastructure services in cities covered under the Mission and there should be establishment of linkages between asset-creation and asset-management through a slew of reforms for long-term project sustainability ; Green building concepts should be implemented.

      Along the lines suggested by the administrative reforms commission over seven years ago, states should undertake “activity mapping” for municipal governments to be clear about which activities are essentially for them to manage, which require them to act as agents for higher tiers of government, and which involve sharing responsibility with other tiers of government. There is no “one size fits all here” – the answer will vary across municipalities.

      The office of an empowered mayor (instead of the municipal commissioner) must take responsibility for administrative co-ordination internally between municipal departments, and externally with state and central government agencies.

      Urban planning mechanisms need an overhaul to unify land record keeping, integrate land use with transport planning, and embed municipal plans into district and regional plans.

      -local bodies should fill vacancies
      -time tested master plans should be strengthen instead of preparing quick fix City development plans
      -populist policies and reforms should have their logical conclusion and should be not done in great haste.
      -land development should be the part of planning of urban development
      -project management skills needs to be enhanced = timely completion of projects
      -more PPP projects
      Successful/Unique/Innovative examples of urban development model-

      ‘Kudumbshree’ model

      It is social empowerment scheme, launched by the Government of Kerala in 1998 for wiping out absolute poverty from the State through concerted community action under the leadership of Local Self Governments, Kudumbashree is today one of the largest women-empowering projects in the country. The programme has 41 lakh members and covers more than 50% of the households in Kerala. Built around three critical components, micro credit, entrepreneurship and empowerment, the Kudumbashree initiative has today succeeded in addressing the basic needs of the less privileged women, thus providing them a more dignified life and a better future. Literal meaning of Kudumbashree is prosperity (shree) of family (Kudumbam).

      Chhattisgarh PDS model 

      State government has started managing information systems.It began with computerization of Fair Prices Shops (FPS) and data related with stocks and sales to enable swift allocation of grains. Mobile based applications including SMS alerts for interested beneficiaries were offered which improved the access to information about food grains lifted from godowns and their delivery at ration shops.

      In Raipur, individuals are given the choice of the fair price shop of his/her liking, flexibility of buying in smaller quantities rather than in only on transaction, etc. Portability of ration card across the shops helped to improve customer satisfaction.

      Solid waste management in OKHLA

      Waste management is the concern for any urban city with respect to its safe disposal, recycling of waste products and also generating energy from wastes.

      Timarpur Okhla Municipal Solid Waste Management project is the first commercial waste-to-energy facility in India that aims to convert one-third of the Delhi garbage into the much-needed electricity, enough to serving 6 lakh homes. It has become the first to get carbon credits from United Nations Framework Convention on Climate Change in the country in 2013.

      Delhi metro

      It is one of the world-class metro. To ensure reliability and safety in train operations, it is equipped with the most modern communication and train control system. For its energy efficient practises, it has earned carbon credit points from UN.

      Community policing for security

      Community Policing for Students, adopting Student Police Cadet model of Kerala which is a school-based youth development initiative that trains high school students by inculcating in them respect for law, discipline, civic sense, empathy for vulnerable sections of society and resistance to social evils.

      The Kerala model, which is meant for all government, government-aided and private unaided schools, imparts training to students through various camps and classroom activities involving local police personnel who interact with them at regular intervals with instructions on certain dos and don’ts.

      The concept of the community policing is aimed at associating citizens with the local police in solving neighbourhood problems in enforcing laws, preventing and detecting crimes, restoring order and peace in the area and reducing crimes against women and weaker sections.

      Locating and reporting to the police about strangers and other persons of doubtful character, assisting local police in patrolling at night in crime prone areas, ensuring timely flow of crime related intelligence from the community to the police and ensuring communal harmony through collective efforts particularly during festivals, religious processions and public functions are some of the key functions of ‘community policing’.


      Urbanization has undermined old forms of political mobilization based on caste and religious identities and favors local issues to be resolved on right based approach. Urbanisation has its impact on all aspects of day-to-day life. Family structure has also been influenced by urbanisation. In the rural society the concept of family living is different from that in the urban society.

      In the urban society usually the families are nuclear, a very small percentage of households’ have joint families, whereas in rural society most of the households have joint families. This change in family structure is a direct result of urbanisation. In urban areas, especially in the metropolitan cities, people of extremely divergent cultures live together. This has a positive impact. People come to know about each other’s culture and they exchange their ideas, breaking the barriers which earlier used to exist between them. This results in cultural hybridisation.

      Questions Asked by Insightsonindia on Urbanisation 

      Do you agree with the view that rapid urbanization in India would dilute casteism and caste a major factor in elections? Justify. (200 Words)
      “The answer to cleaning air and water lies in reforming our regulatory framework.” Comment.
      The lack of resources is only a part of the challenge of urban development in India.  What are the  non-financial challenges to sustainable urbanization in India? How to overcome them? Critically analyze. (200 Words)
      Analyze how encouraging the growth of rental housing helps in alleviation of urban housing problems? What measures has government taken in this regard.(200 Words)
      5.“Sustainable and equitable urban development is possible only when our cities adequately address the issue of housing the poor.” Critically analyze the problem of housing for the poor in Indian cities. (200 Words)
      6.Critically evaluate the success of JNNURM in improving the conditions of urban poor with  suitable examples. (250 Words)
      In your opinion which urbanisation related issues need to be addressed immediately? and why? Comment.
      What is a ‘city system’? Explain how and why reforming municipal bodies is crucial to reforming city systems.
      Basic details- City systems refer to the laws, policies, institutions and institutional processes, and accountability mechanisms, that pervade the functioning of municipal corporations and which determine the quality of life of citizens. City systems are, therefore, root causes.

      It basically aims to provide quality of life to city dwellers by ensuring accessibility and availability of physical infrastructure like transports systems, roads, sewerage systems, garbage handling systems etc. and social infrastructure like provision of safety, security and freedom from pollution etc. The city system depends directly on the concept of democratic decentralization which was ensured first as Directive Principle of State Policy and later though 73rd and 74th amendments of our constitution by assigning constitutional status to the the Gram Panchayats and Municipalities.

      Critically examine the major issues and challenges that India faces as her urbanisation proceeds.
      Discuss the emerging problems being face by megacities around the world.
      Hardly 10 per cent of sewage generated in the country is treated to recycle water. Critically examine the reasons and offer solutions to address this problem.
      In the context of growth of Indian cities, critically analyse the process of urbanisation and its effect on water availability.
      Critically comment on the ‘smart city’ concept.
      Examine why southern states of India are more urbanised that their counterparts in the rest of India.
      With an example, critically examine the flaws associated with urban planning in India. What suggestions would you give to overcome these flaws? Explain.

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